Leaving the shop, a man says "I love your store" -- which has a distinctive smell and products ranging from cannabis flowers to creams, cakes and candies.

Kiloh, who has been in the industry for a decade, says his biggest concern is that while he is closed awaiting a license, hundreds of other shops will be operating without one -- offering attractive prices and drawing customers away.

Dispensaries can be seen on every corner, but it is hard to know which ones are legal.

Kiloh -- who is also an economist and president of plant-based therapeutics corporation United Cannabis -- claims "about 80 percent of the industry that operates in Los Angeles right now operates without a permit and without paying taxes."

He also estimates only 135 shops operate above board.

According to Arcview, the illegal market generated $5.1 billion in 2016.

- 'Crazy fluctuation' -

Authorities in Los Angeles have said they are working on a plan to combat illicit drug trading.

For example, the police have the power to cut off electricity and water at illegal vendors.

Other more conservative cities will simply prohibit sales.

Meanwhile, some projections estimate that costs could hike up to 70 percent -- due to state tax set at 15 percent, 10 percent sales tax, and municipal taxes of up to 10 percent on top of that -- as well as license requirements and required technology such as trackers for each plant.

"You could see some crazy fluctuation in price over the first year or two," said Dayton.

Marijuana for medical use should become cheaper and available for purchase in more quantities.

Kiloh estimates that to meet current demand, "you'd probably have to have 10,000 licenses available right now" in California.

In neighboring Nevada in July, when recreational marijuana went on sale, emergency measures had to be implemented to allow distributors to meet the astronomical demand.